Despite economic recovery: Ireland suffers from a housing shortage

Ireland is actually doing well; The economy has been improving for years. At the same time, fewer and fewer people are finding affordable housing. The middle class is particularly affected.

Andrew and Chrissie now live with their two children in Cabra, a family-friendly and quiet area in the north of the Irish capital, Dublin. They are both in their early 30s, well-educated and have always held full-time jobs in recent years: Andrew as Shipping Coordinator and Chrissy as Marketing and Community Manager. The young couple lived in the rental for a long time until they followed their desire to own their own home in 2017.

The two quickly realized that despite their dual income, it would be difficult to save enough equity to get a home loan. In order to save money, Andrew and Chrissy gave up their rented apartment and moved in with Chrissy’s uncle to save on rent.

Millennials are the most affected

Andrew and Chrissy are not isolated cases. More and more people, especially young Irish people, are suffering from rapidly rising rents. Last year alone, new rents in Ireland rose by 8.9 per cent. In the capital, Dublin, the average new rent is now more than €2,100. Given these figures, around two-thirds of all Irish people under the age of 30 cannot afford to rent an apartment.

Students are particularly affected. University College Cork graduate Sami Shakouk had between 20 and 30 views at the beginning of the semester before he finally found something. “I only found a room in a shared flat at the last minute, on the day the semester started. It was not unusual for me to show up to watch, and there were 40 to 50 other students already there and the room was given away to them within a few hours.” “

It’s not just students who are struggling; Young professionals often have to find alternative paths. Many are still living with their parents, staying with friends or trying to “couch surf.” Some even face the risk of homelessness. When asked, Wayne Stanley, executive director of Simon Communities, an organization against homelessness, emphasized: “We are seeing an alarming phenomenon that more and more well-paid workers are also looking for support. The number is still small, but it is growing.” “.

The long shadow of the financial crisis

Experts attribute the continued increase in rents and real estate prices to the country’s strong population growth in recent years. The high birth rate compared to the European Union and the large influx of workers and students have led to a very strong demand for housing. “The problem is a severe shortage of adequate housing,” says Sian Carolan, managing director of DNG Bank Financial Services. “This shortage also dates back to the financial crisis of 2007/08.”

Similar to the UK, Ireland is a country of landlords. The ownership rate is 70%, much higher than 47% in Germany. Purchasing your property at an early age is deeply rooted in culture and is an essential part of retirement planning. This is one of the reasons why Ireland experienced a real estate boom until 2008, similar to Spain.

With the collapse of the financial and real estate markets during the 2007/08 financial crisis, Ireland was particularly hard hit. “Banks and lenders, as well as individuals, simply did not have the money to build apartments on a large scale. In addition, there was great reluctance in politics,” Carolan describes. There has been a hiatus in housing construction for several years, from which the country has yet to recover.

Difficult recovery

After a period of stagnation, new construction has increased again in the past few years. As the economy grows, the money is there, and it is easier for construction companies to access funds. Politicians, who had left housing construction to the private sector for decades, also increased their efforts and set housing targets. It is expected that 33,000 new homes will be built annually between 2021 and 2030.

Wayne Stanley welcomes the government’s efforts, but believes the targets are not ambitious enough. Stanley calls on politicians to do more, especially in the field of social and non-profit housing. “Only an adequate supply of safe, and above all affordable, housing can combat the housing crisis in the medium term.”

Andrew and Chrissie had to live with Chrissie’s uncle for over a year until they were finally able to realize their dream of owning their own home. “And we were very lucky. We knew people who had been searching for several years and couldn’t find anything. Some of them even gave up.” To help young people like them find and buy a home, they set up the initiative and the ‘First Time Buyers Ireland’ Facebook group. The group now has over 15,000 members and supports house hunters on their way to their first property.